Liberty International Underwriters v Australian Securities and Investments Commission, in the matter of Moore Murphy Holdings Pty Ltd

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judgment Date: 15 February 2021
• Neutral Citation: [2021] FCA 103
• Date: 15 February 2021

Federal Court of Australia

Liberty International Underwriters v Australian Securities and Investments Commission, in the matter of Moore Murphy Holdings Pty Ltd [2021] FCA 103

File number:	WAD 18 of 2021
Judgment of:	MCKERRACHER J
Date of judgment:	15 February 2021
Catchwords:	CORPORATIONS – application to reinstate registration of a company pursuant to s 601AH(2) of the Corporations Act 2001 (Cth) – where the purpose of the application is to enable the plaintiff to continue proceedings in the name of the company
Legislation:	Corporations Act 2001 (Cth) ss 601AD(1), 601AH, 601AH(2), 601AH(3), 601AH(5)
Cases cited:	Re Austral Bronze Pty Ltd (No 2) [2020] NSWSC 1633 Australian Competition and Consumer Commission v Australian Securities and Investments Commissioner (2000) 34 ACSR 232; [2000] NSWSC 316 BSA Limited v Australian Securities and Investments Commission [2020] FCA 1823 Eyles v Curved Plywood [2004] NSWSC 257 Re JJ Weeks Constructions Pty Ltd (1982) 31 SASR 96 Miltonbrook Pty Ltd v Westbury Holdings Kiama Pty Ltd (2008) 71 NSWLR 262 State of Western Australia v Australian Securities and Investments Commission [2020] FCA 810 The Bell Group Limited v Australian Securities and Investments Commission (2018) 128 ACSR 247; [2018] FCA 884 Re Timothys Pty Ltd & the Companies Act [1981] 2 NSWLR 706 White v Baycorp Advantage Business Information Services Ltd (2006) 200 FLR 125; [2006] NSWSC 441
Division:	General Division
Registry:	Western Australia
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Number of paragraphs:	29
Date of last submission/s:	11 February 2021
Date of hearing:	Determined on the papers
Counsel for the Plaintiff:	T O’Neill
Solicitor for the Plaintiff:	Wotton + Kearney Lawyers

ORDERS

		WAD 18 of 2021
IN THE MATTER OF MOORE MURPHY HOLDINGS PTY LTD (DEREGISTERED) ACN 164 785 504
BETWEEN:	LIBERTY INTERNATIONAL UNDERWRITERS (ABN 61 086 083 605) Plaintiff
AND:	AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION Defendant

order made by:	MCKERRACHER J
DATE OF ORDER:	15 FEBRUARY 2021

THE COURT ORDERS THAT:

1. Before close of business on 22 February 2021, any person or party opposing the application may indicate their opposition to the Court by sending an email to Associate.McKerracherJ@fedcourt.gov.au.

2. Any person or party who so indicates opposition in accordance with Order 1 will have a further seven days from the date of such email to file written submissions (not to exceed five pages).

3. Unless the Court orders otherwise, any further determination of the matter proceed on the papers.

4. Unless any opposition is indicated in accordance with Order 1, the following orders are made:

   1. Pursuant to s 601AH(2) of the Corporations Act 2001 (Cth), the defendant reinstate the registration of Moore Murphy Holdings Pty Ltd ACN 164 785 504.

   2. Pursuant to section 601AH(3) of the Corporations Act, the proceedings commenced by D-Tech Contracting Pty Ltd (being the former company name of Moore Murphy Holdings Pty Ltd) against Kewmoore Pty Ltd in the District Court of Western Australia, being matter CIV 942 of 2019, are deemed by this order to be reinstated and any action of D-Tech Contracting Pty Ltd (now Moore Murphy Holdings Pty Ltd) taken in those proceedings during the period of deregistration is validated by this order.

   3. There be no order as to costs.

5. The Plaintiff serve a sealed copy of these orders on the defendant, the former directors of Moore Murphy Holdings Pty Ltd, and the proper officer of Kewmoore Pty Ltd as soon as reasonably practicable.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCKERRACHER J:

BACKGROUND

1. D-Tech Contracting Pty Ltd (Company) was registered on 12 July 2013. It carried on the business of providing, inter alia, marine mechanical services. On 10 July 2019 the Company’s name was changed to Moore Murphy Holdings Pty Ltd.

2. On 20 July 2017 the Company made a claim (Claim) pursuant to a Marine and General Liability Insurance Policy that it held with the Applicant, Liberty International Underwriters (Insurer). The Claim related to work that the Company had carried out for a customer in respect of the engine of a cray fishing boat. The engine had purportedly failed, causing the customer to suffer loss and damage. The Insurer granted indemnity under the policy in respect of the Claim, and a sum was duly paid out to the customer by the Insurer.

3. On 13 March 2019 the Insurer, exercising its right of subrogation, commenced proceedings in the District Court of Western Australia against Kewmoore Pty Ltd trading as R Moore and Sons (RMS). It is alleged in those proceedings that the engine failure was caused by RMS incorrectly machining engine cylinder heads, which task RMS had been contracted to undertake by the Company (District Court proceeding).

4. The allegations made in the District Court proceeding are supported by the expert evidence of a forensic engineer.

5. Various procedural steps were taken in the District Court proceeding during 2019 and 2020. On 13 July 2020 the matter was listed for trial for 6 days commencing on 25 March 2021.

6. On 3 December 2020, the Insurer’s solicitors discovered that the Company had become deregistered on 28 October 2020. It would appear that the directors had voluntarily de-registered the Company after selling the business that it had operated.

7. On 14 January 2021, the Insurer lodged with the Australian Securities and Investments Commission (ASIC) an application seeking reinstatement of the registration of the Company. That application has not yet been processed.

8. The Insurer seeks an order pursuant to s 601AH(2) of the Corporations Act 2001 (Cth) reinstating the registration of the Company and an order pursuant to s 601AH(3) of the Act reinstating the District Court proceeding and validating any step taken in respect of those proceedings during the period of deregistration.

RELEVANT LAW

9. Section 601AD(1) of the Act provides that, upon deregistration, a company ceases to exist.

10. Section 601AH(2) of the Act provides that the Court may make an order that ASIC reinstate the registration of the company if:

1. an application is made by a ‘person aggrieved by the deregistration’; and

2. the Court is satisfied that it is ‘just’ that the company’s registration be reinstated.

11. The expression ‘person aggrieved’ should not be construed narrowly: The Bell Group Limited v Australian Securities and Investments Commission (2018) 128 ACSR 247; [2018] FCA 884 (at [47] and the authorities cited therein). Where deregistration has extinguished a legal right of value, or potential value, the applicant will be a ‘person aggrieved’ for the purposes of the provision: Bell Group (at [51] and the authority cited therein).

12. I also noted in Bell Group (at [72]-[73]) that in considering whether it is ‘just’ to make an order under s 601AH(2), the Court should have regard to the circumstances in which the company came to be deregistered, its future activities, whether any person is likely to be prejudiced by the reinstatement and whether there are any matters of public policy for, or against, the making of an order: see also Australian Competition and Consumer Commission v Australian Securities and Investments Commissioner (2000) 34 ACSR 232; [2000] NSWSC 316 per Austin J (at [27] and the authorities cited...